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States and cities adopt rules that go beyond what federal employment laws require.
Move over, California. It turns out that the nation’s most populous state isn’t the only trendsetter when it comes to employment law. Other cities and states also go well beyond what federal rules require.
New York City, Washington, D.C., Massachusetts and New Jersey are among those on the cutting edge that merit HR’s attention. That’s because trends that start in these bellwether jurisdictions are likely to spread.
Wherever you are, you may soon need to comply with burgeoning laws like those described below on the issues of paid leave, discrimination, equal pay and the classification of independent contractors.
The rules that apply to the workplace are swiftly changing in New York City, which is at the forefront on several issues.
Sick leave. Many states and localities have sick-leave laws, but New York City’s Earned Sick Time Act is well ahead of the curve, says Jill Cohen, an attorney with Eckert Seamans in Princeton, N.J., who practices in New York as well as New Jersey.
In the event the employee’s place of business is closed due to a public health emergency.
All companies in New York City that employ five or more individuals must comply with this law. Workers earn one hour of paid time for every 30 hours of work, and the use and accrual of this leave is capped at 40 hours per year.
Companies that don’t want to allow workers to carry time over can pay out the earned and unused sick leave at the end of the year, Cohen notes.
The New York City sick-leave statute defines “family member” more broadly than other city and state laws. A family member can be:
Family leave. On the state level, New York has enacted paid-family-leave legislation that takes effect Jan. 1, 2018. California, New Jersey and Rhode Island have similar laws on the books. And as of 2020, Washington, D.C., will require paid family leave as well.
Discrimination. The nation’s most populous city also maintains some of the most expansive anti-discrimination legislation in the country, says Daniel Schlein, an attorney in New York City. The New York City Human Rights Law protects more categories of people than its federal counterparts, including Title VII of the Civil Rights Act of 1964.
The local statute applies to employers with four or more employees—which is lower than Title VII’s 15-worker threshold. In addition, unlike the federal civil rights act, the city’s measure has no cap on compensatory and punitive damages.
The local ordinance does not require harassment to be severe and pervasive to be actionable, and it contains very broad obligations to accommodate religious beliefs and pregnancy, note Richard Greenberg, an attorney with Jackson Lewis in New York City, and Michelle Phillips, an attorney with Jackson Lewis in White Plains, N.Y.
In 2015, the law was amended to include guidelines related to transgender individuals that, among other things, require New York City businesses to implement gender-neutral dress codes.
Also be mindful of New York City’s Stop Credit Discrimination in Employment Act, which became effective in 2015, Schlein says. It amended the city’s human rights law to prohibit most employers from checking applicants’ salary history or creditworthiness when making employment decisions. Accordingly, when conducting job interviews in the city, don’t include questions about job seekers’ credit card debt, child support, student loans, foreclosures, missed or late payments, bankruptcies, judgments, and liens.
Prohibited Discrimination in NYC
The New York City Human Rights Law is quite expansive and recognizes several categories of illegal discrimination, such as for:
Washington, D.C., “is a great city and has much to offer employers,” notes Daniel Prywes, an attorney with Morris, Manning & Martin in Washington, D.C.
“However, employers should avoid unpleasant surprises by making sure that they understand all the ways that laws in the district are more generous to employees than federal statutes and the rules of other jurisdictions.”
Paid leave. In particular, be aware of the new 0.62 percent payroll tax—starting in 2019—that will fund Washington, D.C.’s paid-leave program, Prywes says.
In late 2016, the city passed legislation that, beginning in 2020, will allow private-sector employees to take paid leave for family and medical reasons—something federal law doesn’t permit.
Human rights. D.C. employment laws are “considerably more stringent than federal laws,” Prywes says. This is especially true for the Washington, D.C., Human Rights Act (DCHRA).
Unlike Title VII, the DCHRA has:
The DCHRA is “one of the broadest civil rights laws in the nation,” notes Tom Spiggle, an attorney and founder of The Spiggle Law Firm in Washington, D.C. It applies to all employers regardless of size. This contrasts with Title VII and the Americans with Disabilities Act, which apply only to organizations with 15 or more employees. Most state laws have similar minimum thresholds to those federal statutes.
The bottom line for HR is to be sensitive to Washington, D.C., as a higher-risk environment for businesses, Prywes says.
[SHRM members-only resource: State-By-State Employement Laws]
Compliance Coordination Challenges
The Bay State has become quite active on the employment law front. “California is still further ahead of the curve than Massachusetts, but Massachusetts is trying to catch up,” says Brian Lewis, an attorney with Jackson Lewis in Boston.
Equal pay. Under amendments to the Massachusetts Equal Pay Law that will take effect Jan. 1, 2018, employers will not be allowed to ask about a person’s salary history before making a job offer or to ban discussions about compensation among employees. But these are not blanket prohibitions. “The exceptions to the salary inquiry prohibition are interesting, and it remains to be seen how they will be interpreted,” says Marjory Robertson, assistant vice president and senior counsel with Sun Life Financial (U.S.) Services Co. Inc. in Wellesley Hills, Mass.
The new law will not prohibit candidates from voluntarily disclosing their past compensation. It is possible that companies may be able to provide applicants with “voluntary disclosure” forms to sign relating to salary history, but there could be legal challenges to this practice on the grounds that the candidate could feel pressured to disclose salary information, she says. “Further, if a candidate declined to provide his or her salary history and was not offered a job, the employer could be at risk for a retaliation claim,” she cautions.
The Massachusetts statute also does not prohibit a company from seeking to confirm a person’s salary history after compensation has been negotiated and a job offer has been made. But the utility of that provision is questionable. “It is not clear why an employer is permitted to verify salary history after an offer has been made,” Robertson says. “If an employer discovers that an employee made substantially less than the amount of compensation offered, the employer may not be able to take any action, since it could be viewed as a violation of the law or as retaliation.”
It is also not clear what it means for an offer to include “compensation,” she adds. For example, you could propose to pay a candidate the same amount he or she previously earned and make the offer contingent on verification of that figure. “However, such an approach may be subject to challenge on the grounds that it defeats the purpose of the statute and that ‘compensation’ literally means including an actual dollar amount in the offer.”
Pay History Bans Are Spreading
Since the Massachusetts pay equity law was adopted in August 2016, other jurisdictions have moved to enact legislation relating to pay history.
This trend toward prohibiting inquiries about prior compensation will require HR professionals to make dramatic changes in their recruiting practices, says Marjory Robertson, assistant vice president and senior counsel with Sun Life Financial (U.S.) Services Co. Inc. In jurisdictions with these laws, HR will need to base compensation offers on the value of the jobs in the marketplace, which may be challenging to quantify.
New Jersey might not seem like it has a lot in common with California, but, like the Golden State, the Garden State offers expansive employee rights, says David Garland, an attorney with Epstein Becker Green in New York City and Newark, N.J.
Whistle-blowers. The state has one of the country’s broadest whistle-blower protection laws. The New Jersey Conscientious Employee Protection Act doesn’t require whistle-blowers to show that employers did something illegal, only that the whistle-blower reasonably believed a violation happened.
Discrimination. The state’s anti-discrimination law, the New Jersey Law Against Discrimination, is also a broad remedial statute. It prohibits discrimination based on sexual orientation and, in certain limited situations, bars sexual harassment against independent contractors.
“Need not apply.” In 2011, New Jersey became the first state to adopt a “need not apply” law prohibiting employers from publishing job postings that list “currently employed” as a job qualification or that indicate applicants must have jobs, notes Christina Joy Grese, an attorney with Duane Morris in New York City who also practices in New Jersey.
The local statute does not, however, bar companies from requiring prospective employees to have current and valid professional licenses or credentials, and neither does it prevent employers from limiting their job search to their own employees, she says.
Penalties include a fine of $1,000 for the first violation, $5,000 for a second and $10,000 for each subsequent infringement, collectible by the commissioner of labor and workforce development. The statute does not create a private cause of action for individuals against prospective employers.
Note that a 2014 bill would have gone even further and prohibited employers from refusing to hire applicants because they were unemployed, but it was vetoed by Gov. Chris Christie on the grounds that it would have been administratively unenforceable and would have driven up the costs of doing business in the state.
Regarding sick leave, many people believe that once a new governor is elected in November, there will be a renewed effort to pass a statewide paid-sick-leave law, Cohen says.
Paid Sick Leave: The N.J. Municipalities
Several New Jersey municipalities have sick-leave statutes that permit employees to accrue paid leave to care for themselves and their family members and that in many cases are more stringent than state or federal government laws. These municipalities include:
Be wary of using independent contractors or consultants. “This has been an area of much focus by both federal and state agencies over the last few years, and now it is even easier for workers to challenge status under recent New Jersey case law. Specifically, the presumption is that a worker is an employee and the burden is on the employer to establish otherwise,” Grese says.
Finally, as a number of additional employee-friendly initiatives are pending in the New Jersey Legislature, stay apprised of proposed legislation that “could significantly impact how you do business,” she recommends.
That’s good advice for HR professionals in any state.
Allen Smith, J.D., is manager of workplace law content for SHRM.
Illustration by Pete Ryan for HR Magazine.
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